The Ontario government has reached into one of its own provincial agencies to name Howard Wetston, a trusted bureaucrat and former federal court judge, as the country's top securities regulator.
Mr. Wetston, 63, was appointed chairman of the Ontario Securities Commission on Wednesday. Finance Minister Dwight Duncan personally plucked Mr. Wetston from the Ontario Energy Board, where he was midway through a second term as chairman, to ensure that the province's interests are protected as Ottawa seeks to replace 13 provincial and territorial regulators with a single entity.
"I believe he has the exact skill sets we need and a passion for the creation of a common securities regulator that I think we need to have," Mr. Duncan said in an interview. "I believe Howard will work very hard to protect Ontario's interests in the discussions."
He is replacing David Wilson, whose term in office expires Oct. 31. While most OSC chairmen are appointed for five-year terms, Mr. Wetston will be appointed for three years pending a decision about whether a national regulator will be created for Canada.
Mr. Wetston has long experience with both securities law and the public sector. He has headed Ontario's energy regulator since 2003, and was vice-chairman for the OSC for four years before that. Earlier in his career, he worked in Ottawa at the Bureau of Competition Policy and was a federal court judge for six years.
Friends and colleagues describe the avid Toronto Raptors basketball fan as bright and blunt, and say he will not be content to be a place-holder who sits back and waits for the OSC to be folded into the national regulator.
"He's a very smart guy, a very hard working guy. He has strong opinions. And I know he continued to care passionately about securities even when he was involved in the electricity business," said Jim Hinds, a member of the national regulator transition team.
"He's the ultimate straight-shooter," said RioCan REIT chief executive officer Edward Sonshine, who serves with Mr. Wetston on the board of Toronto's Mount Sinai Hospital.
"What you see if what you get. I find him to be relatively low key, but very determined in putting forth his position."
Mr. Duncan said having Mr. Wetston at the helm of the OSC will help Ontario and the federal government better withstand court challenges launched by Alberta and Quebec over the national regulator. He is concerned those leading the talks on creating a national regulator could compromise the quality of securities rules and enforcement to encourage the holdout provinces to come aboard.
"We want to make sure that we're creating a truly solid national securities regulator," Mr. Duncan said. "I think he's got the skill set to help us make our way through the minefields that are out there."
Mr. Wetston's appointment marks a return to a long tradition of having the OSC led by a senior lawyer. Mr. Wilson, a former investment banker, was a rare non-lawyer to head the OSC.
But lawyers believe there was more need this time for a chairman with a strong legal background. In addition to a Supreme Court challenge to be heard next year, the new national regulator proposal includes plans to adopt a new securities act, grant the regulator expanded enforcement powers, and separate investigative and adjudicative functions.
"When you think of the extent of the restructuring, and the proposals for the separate administrative proposal, you can see value in having somebody with legal background and training going forward in that,' said lawyer Kelley McKinnon, who was previously the OSC's chief litigation counsel.
"I think it's a great choice," securities lawyer Joe Groia said. "You get a guy who obviously knows the ins and outs of the commission, and he knows the ins and outs of the political dimension, and he spent a long time up in Ottawa with the competition bureau, so he knows the ins and outs of the federal system."
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